2010 Disciplinary Actions 


    October

    David Beck of Lexington, KY

    As a result of an investigation of alleged violations of the Codes of Professional Conduct of the AICPA and the Kentucky Society of CPAs, Mr. Beck entered into a settlement agreement under the Joint Ethics Enforcement Program, effective July 6, 2010.

    Information came to the attention of the Ethics Charging Authority (“ECA”) (comprised of the AICPA Professional Ethics Executive Committee and the Kentucky Society of CPAs Professional Ethics Committee) alleging a potential disciplinary matter with respect to Mr. Beck’s performance of professional services in connection with the audit of a commercial entity (the “Entity”).

    After an investigation, Mr. Beck was charged with violating the rules of the Codes of Professional Conduct of the AICPA and the Kentucky Society of CPAs as follows:

    Rule 201 – General Standards, A. Professional Competence
    The auditor did not have the professional competence to perform his role as engagement partner.

    Rule 202 – Compliance with Standards

    1. The auditor failed to adequately supervise the planning and the conduct of the engagement.  Specifically: (AU §311.11 – 311.14; SAS No. 22)
      1. He did not participate in the initial planning meetings; did not plan audit staffing and did not determine what audit procedures would be performed;
      2. He did not review the wholesale division inventory observation work papers;
      3. He did not review a work paper prepared by the engagement manager that documented a $30 million deposit in transit that was incorrectly classified.
    2. The auditor failed to adequately document (AU §339; SAS No. 41):
      1. The details and audit procedures performed to support the reclassification entry made to adjust the entity’s Buyers Cash account;
      2. Procedures performed to audit inventory pricing and the conclusions reached;
      3. Procedures performed to audit inventory obsolescence and the conclusions reached;
      4. The source of wholesale inventory adjustment factors and their applicability to the Entity;
      5. Why new wholesale inventory was marked up for commissions paid when such commissions applied only to purchases of used books;
      6. Procedures performed to conclude on the collectability of loans to the Entity’s owner or to determine that no contingent liability, with respect to the Entity’s guarantees of the owner’s personal debt, was necessary and conclusions reached.

    Agreement:

    In consideration of the ECA forgoing any further proceedings in this matter, Mr. Beck agrees as follows:

    1. To waive his rights to a hearing under AICPA bylaws section 7.4 andArticle XI, Section 3, of the Kentucky Society of CPA’s bylaws;
    2. To neither admit nor deny the above specified charges;
    3. To comply immediately with professional standards applicable to the professional services he performs, and to submit evidence of such compliance.
    4. To be suspended by the AICPA and the Kentucky Society of CPAs for a period of two years.
    5. That the ECA shall publish his name, the charges, and the terms of this settlement agreement.
    6. To complete 40 hours of GAAP-related continuing professional education courses (to be pre-approved by the Professional Ethics Division) within 12 months of the effective date of this agreement and provide evidence of such completion (e.g., attendance sheets, course comple­tion certificates, etc.).
    7. To complete the AICPA’s 8-hour Comprehensive Ethics Course (self-study with a score of 90% or better; and to indicate his state of licensure when registering for the course) within 12 months of the effective date of this agreement and to provide evidence of such completion (e.g. course completion certificate).
    8. To provide an attestation, immediately then every six months for three years from the effective date of this agreement, that he is not performing any attest services.  If he returns to performing such work, he will be required to complete the following 40 hours of continuing professional education (CPE) prior to commencing fieldwork and to provide evidence of such completion (e.g., attendance sheets, course completion certificates, etc.):

      Annual Update for Accountants and Auditors 24 hours
      Other GAAS and Accounting courses selected by the respondent and pre-approved by the Professional Ethics Division  16 hours
      Total 40 hours
    9. To comply with directive c. above and if he returns to performing audit engagements, to hire an outside party, acceptable to the ECA, to perform a preissuance review of the reports, financial statements, and working papers on all audit engagements performed by him for a period of one year from the date the preissuance reviewer is approved by the ECA.  In addition, he agrees to permit the outside party to report quarterly to the Subcommittee on his progress in complying with the terms of this agreement as stated herein to comply with professional standards.  The first such report is due 30 days from the date he returns to performing such engagements and every 90 days thereafter.  The preissuance reviews would be performed at his expense.  The preissuance review period may be extended by the ECA if the ECA decides based on these reports, that his audit work has been unsatisfactory.
    10. In further compliance with directive c. above and if he returns to performing attest engagements, to submit no later than six months after the completion of the preissuance review period in directive i. above, a list of the highest level (audit, review, compilation) of engagements that he performed during the six month period following completion of the preissuance review period. The following information should be included regarding the engagements listed: his role on the engagements, the number of hours spent on the engagement; level of professional services rendered; type of organization; if it was an initial engagement and whether the audit was performed in compliance with OMB Circular A-133. The ECA will select one of these engagements for review. He will be informed of this selection and will be asked to submit a copy of his report, the financial statements, and working papers related to that engagement for review by the ECA.

      After an initial review of such report, financial statements, and working papers, the ECA may decide that he has substantially complied with professional standards and close this matter. Or, the ECA may decide that an ethics investigation of the engagement submitted is warranted. If at the conclusion of the investigation, the ECA finds that professional standards have in fact been violated, the ECA may refer the matter to the trial board for a hearing or take such other action as it deems appropriate.
    11. To be prohibited from performing peer reviews until all directives outlined in this agreement are met. This prohibition will be communicated to his peer review oversight agency.

      That the ECA shall monitor his compliance with the terms of this settlement agreement and initiate an investigation where the ECA finds there has been noncompliance.

    Thomas M. Ariola, Jr. of Waterbury, Connecticut
    As a result of a decision by a hearing panel of the Joint Trial Board, Mr. Ariola’s AICPA membership was terminated effective July 2, 2010. Mr. Ariola was found guilty of violating AICPA Bylaw 7.4.6 by failing to cooperate with the Ethics Charging Authority in an investigation of his professional conduct.

    Philip J. Katz of Brooklyn, New York
    As a result of a decision by a hearing panel of the Joint Trial Board, Mr. Katz’ AICPA membership was terminated effective July 2, 2010. Mr. Katz was found guilty of violating Rule 501 – Acts Discreditable of the AICPA’s Code of Professional Conduct by failing to comply with the directives of a previous hearing panel’s decision.

    William B. Katz of Brooklyn, New York
    As a result of a decision by a hearing panel of the Joint Trial Board, Mr. Katz’ AICPA membership was terminated effective July 2, 2010. Mr. Katz was found guilty of violating Rule 501 – Acts Discreditable of the AICPA’s Code of Professional Conduct by failing to comply with the directives of a previous hearing panel’s decision.

    Steven S. Gallers of Tamarac, Florida
    As a result of a decision by a hearing panel of the Joint Trial Board, Mr. Gallers’ AICPA membership was terminated effective July 8, 2010. Mr. Gallers was found guilty of violating AICPA Bylaw 7.4.6 for failing to comply with the terms of a settlement agreement.

    James T. Jubb of Baltimore, Maryland
    As a result of a decision by a hearing panel of the Joint Trial Board, Mr. Jubb’s AICPA membership was terminated effective July 2, 2010. Mr. Jubb was found guilty of violating AICPA Bylaw 7.4.6 by failing to cooperate with the Ethics Charging Authority in an investigation of his professional conduct.

    David Monaghan of Tulsa, Oklahoma
    As a result of a decision by a hearing panel of the Joint Trial Board, Mr. Monaghan’s AICPA membership was terminated effective July 8, 2010.  Mr. Monaghan was found guilty of violating AICPA Bylaw 7.4.6 for failing to cooperate with the Ethics Charging Authority by not providing a substantive response to communications. 

    Hugh B. Webster of Yanceyville, North Carolina
    As a result of a decision by a hearing panel of the Joint Trial Board, Mr. Webster’s AICPA membership was terminated effective July 8, 2010. Mr. Webster was found guilty of violating AICPA Bylaw 7.4.6 by failing to cooperate with the Ethics Charging Authority in an investigation of his professional conduct.

    Mark Bloom of New York, New York
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Bloom’s AICPA membership was terminated, effective July 20, 2010, as a result of the SEC barring Mr. Bloom from association with any investment adviser and suspending him from appearing or practicing before the Commission as an accountant. This decision was based on the SEC’s findings that Mr. Bloom pled guilty to the allegations, inter alia, that he defrauded investors and obtained money and property by means of materially false and misleading statements; he used the United States mails to send false account statements; he caused commercial interstate carriers to deliver investors’ checks to him via wire; transferred investor funds to unlawfully renovate his home and purchase artwork and jewelry; and obstructed the internal revenue laws by, among other things, promoting tax shelters.

    Peter S. Bromberg of Ft. Lauderdale, Florida
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Bromberg’s AICPA membership was terminated, effective June 11, 2010, because of a final judgment of conviction for a crime punishable by imprisonment for more than one year.Mr. Bromberg pled guilty to violating Title 15, U.S.C. 78m(a), 78ff; 17 CFR 240.12b-20, 240.13a-1371, False Statements in a Report Filed with the United States Securities and Exchange Commission.

    John A. Campbell of Kalamazoo, Michigan
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Campbell’s AICPA membership was terminated, effective June 29, 2010, because of a final judgment of conviction for a crime punishable by imprisonment for more than one year.Mr. Campbell pled guilty to violating Title 18, U.S.C. Section 371, Conspiracy to Defraud the United States.

    Daniel Chiu of Jersey City, New Jersey
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Chiu’s AICPA membership was terminated, effective August 9, 2010, because of a final judgment of conviction for a crime punishable by imprisonment for more than one year.Mr. Chiu pled guilty to violating Title 18, U.S.C. Section 1343, Wire Fraud.

    Catherine Fang of Plano, Texas
    Under the automatic disciplinary provisions of the Institute’s bylaws, Ms. Fang’s AICPA membership was terminated, effective July 21, 2010, as a result of the SEC denying her the privilege of appearing or practicing before the Commission as an accountant. This decision was based on the SEC’s findings that Ms. Fang engaged in improper professional conduct pursuant to Rule 102(e)(1)(ii) of the Commission’s Rules of Practice by repeatedly failing to perform in accordance with applicable professional standards in her audit of a public company she audited from November 2005 through February 2009.

    Thomas P. Flanagan of Chicago, Illinois
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Flanagan’s AICPA membership was terminated, effective August 9, 2010, as a result of the SEC denying him the privilege of appearing or practicing before the Commission as an accountant. This decision was based on the SEC’s allegations that while a partner and Vice Chairman of a “Firm”, he traded in the securities of multiple “Firm” clients on the basis of inside information that he learned through his duties as a “Firm’s” partner.

    Lawrence Goldman of Hagerstown, Maryland
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Goldman’s AICPA membership was terminated, effective June 22, 2010, following revocation of his CPA certificate and license to practice by the Pennsylvania State Board of Accountancy in connection with his guilty plea to a felony charge of voluntary manslaughter.

    Wally Ross of Charlotte, North Carolina
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Ross was suspended from membership in the AICPA for five years, commencing January 5, 2010, coincident with the duration of the suspension period imposed by the North Carolina State Board of CPA Examiners. Specifically, the state board placed Mr. Ross’ CPA certificate on suspension in connection with his failure to file and pay his Firm’s 941 Employer’s Quarterly Payroll Taxes for multiple periods from March 2000 through December 2007, and for failing to file and pay his Firm’s Employer Federal Unemployment taxes for the periods: December 31, 2003; December 31, 2004; December 31, 2005; December 31, 2006; and December 31, 2007.

    Wanda Joyce Smithson of Leoma, Tennessee
    Under the automatic disciplinary provisions of the Institute’s bylaws, Ms. Smithson’s AICPA membership was terminated, effective August 9, 2010, as a result of the Alabama State Board of Public Accountancy revoking her CPA certificate and permit to practice based on acts that resulted in the revocation of her authority to practice as a CPA in another state, and for failing to respond to the Board’s communication.

    David C. Sullivan of Indianapolis, Indiana
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Sullivan’s AICPA membership was terminated, effective June 11, 2010, because of a final judgment of conviction for a crime punishable by imprisonment for more than one year.Mr. Sullivan pled guilty to violating Title 18, U.S.C. Section 1343, Fraud by Wire, Radio, or Television.


    July

    Lawrence Hecht of Rockland, New York
    As a result of an investigation of alleged violations of the Code of Professional Conduct of the AICPA, Mr. Hecht entered into a settlement agreement under the Joint Ethics Enforcement Program, effective May 29, 2010.

    Information came to the attention of the Ethics Charging Authority (“ECA”) (comprised of the AICPA Professional Ethics Executive Committee), alleging a potential disciplinary matter with respect to Lawrence Hecht.

    Mr. Hecht advised that he would be willing to sign a settlement agreement charging him with violating AICPA Bylaw Section 7.4.6 for failing to cooperate with the ECA in its investigation of his alleged misconduct.

    Agreement:

    In consideration of the ECA forgoing any further proceedings in this matter, Mr. Hecht agrees as follows:

    1. To waive his rights to a hearing under AICPA Bylaw Section 7.4;
    2. To neither admit nor deny the above-specified charge;
    3. To be expelled from membership in the AICPA;
    4. That the ECA shall publish his name, the charges and the terms of this settlement agreement.

    William D. Wiseman of Talking Rock, Georgia
    As a result of an investigation of alleged violations of the Code of Professional Conduct of the AICPA, Mr. Wiseman entered into a settlement agreement under the Joint Ethics Enforcement Program, effective June 4, 2010.

    Information came to the attention of the Ethics Charging Authority (“ECA”) (comprised of the AICPA Professional Ethics Executive Committee) in the form of a December 1, 2005 referral from the Securities Exchange Commission (“SEC”) regarding Mr. Wiseman’s conduct as Chief Financial Officer of a division of an SEC registrant.

    After an investigation, Mr. Wiseman was charged with violating the following rule of the AICPA Code of Professional Conduct:

    Rule 501-4 – Negligence in the preparation of financial statements or records

    The respondent failed to prevent the Company from incorrectly amortizing a reserve account’s debit balance instead of charging it to the current period.

    The respondent incorrectly allowed the Company to record a $1.5 million receivable as the result of an informal agreement with a client to recover cost over runs on a project. In addition, once it became apparent that the receivable was uncollectible the respondent allowed the Company to write off the balance over a period of months rather than when it was deemed uncollectible.

    Agreement:

    In consideration of the ECA forgoing further investigation of Mr. Wisemans’s conduct as described above and in consideration of the ECA forgoing any further proceedings in the matter, Mr. Wiseman agrees as follows:

    1. To waive his rights to a hearing under AICPA bylaws section 7.4;
    2. To neither admit nor deny the above specified charges;
    3. To be expelled by the AICPA; and
    4. That the ECA shall publish his name, the charges, and the terms of this settlement agreement.

    John G. Makula of Park Ridge, Illinois
    As a result of a decision by a hearing panel of the Joint Trial Board, Mr. Makula had his AICPA membership terminated, effective May 26, 2010, following a denial by an ad hoc committee of the Joint Trial Board of a request for review of the decision of the original trial board. Mr. Makula was found guilty of violating AICPA Code of Professional Conduct Rule 501-Acts Discreditable for failing to follow the directives of a previous hearing panel decision.

    Ronald I. Anson of Los Angeles, California
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Anson had his AICPA membership terminated, effective March 18, 2010, because of a final judgment of conviction for a crime punishable by imprisonment for more than one year. Mr. Anson pled guilty to violating Title 18, USC Section 371, Conspiracy.

    Diane Bjorkstrom of Palo Alto, California
    Under the automatic disciplinary provisions of the Institute’s bylaws, Ms. Bjorkstrom had her AICPA membership suspended coincident with the duration of the suspension period by the Securities and Exchange Commission, following disciplinary action imposed by the SEC. This decision was based on allegations that Ms. Bjorkstrom agreed to ship product and recognize revenue for a sale that she knew or should have known did not have the paperwork necessary to satisfy her Company’s revenue recognition policy, resulting in the Company’s filing of materially false and misleading financial statements in the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2006.

    Charles Cleghorn of Jenkintown, Pennsylvania
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Cleghorn had his AICPA membership terminated, effective March 5, 2010, following revocation of his CPA certificate by the Pennsylvania State Board of Accountancy for failing to comply with the directives of the Board’s Adjudication and Order.

    Terance Kelley of Independence, Ohio
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Kelley had his AICPA membership terminated, effective March 5, 2010, following disciplinary action imposed by the Securities and Exchange Commission. Mr. Kelley was suspended by the SEC from appearing or practicing before the Commission as an accountant with the right to petition for reinstatement after five years of the SEC’s Order. This decision was based on the SEC’s findings that during a 2006 audit of an SEC registrant’s financial statements, Mr. Kelley violated numerous professional standards by failing to obtain written representations from the registrant’s management, and failing to exercise due care and professional skepticism.

    David C. Mayfield of Oklahoma City, Oklahoma
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Mayfield had his AICPA membership suspended coincident with the duration of the suspension period imposed by the Securities and Exchange Commission. Mr. Mayfield was denied the privilege of appearing or practicing before the Commission as an accountant with the right to request reinstatement after three years from the date of the SEC’s Order. This decision was based on the SEC’s findings that Mr. Mayfield engaged in improper professional conduct pursuant to Section 4C of the Exchange Act and Rule 102(e)(1)(ii) of the Commission’s Rules of Practice.

    Craig Showvaker of Gettysburg, Pennsylvania
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Showvaker had his AICPA membership terminated, effective March 18, 2010, because of a final judgment of conviction for a crime punishable by imprisonment for more than one year.Mr. Showvaker pled guilty to violating Title 18, USC Section 1341, Mail Fraud.

    Terry L. Smith of Umpire, Arkansas
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Smith had his AICPA membership terminated, effective March 5, 2010, following revocation of his CPA certificate by the Arkansas State Board of Accountancy for violating the Board’s Code of Professional Conduct in connection with the suspension of his law license for a period of three years.

    Ray O. Westergard of Bountiful, Utah
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Westergard had his AICPA membership suspended for two years following disciplinary action imposed by the Public Company Accounting Oversight Board. The PCAOB barred Mr. Westergard from being an associated person of a registered public accounting firm with the right that after two years he may file a petition with the Board for consent to associate with a registered public accounting firm. This decision was based on the PCAOB’s findings that Mr. Westergard violated PCAOB rules and auditing standards in auditing the 2004 financial statements of one issuer client.

    Scott Zecher of Teaneck, New Jersey
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Zecher had his AICPA membership terminated, effective March 25, 2010, because of a final judgment of conviction for a crime punishable by imprisonment for more than one year.Mr. Zecher pled guilty to violating Title 18, USC Section 371, Conspiracy to Defraud the United States.

    April

    Harold Dischino of Fairfield, New Jersey
    As a result of a decision by a hearing panel of the Joint Trial Board, Mr. Dischino had his AICPA membership terminated effective March 19, 2010. Mr. Dischino was found guilty of violating AICPA Bylaw 7.4.6 by failing to cooperate with the Ethics Charging Authority in an investigation of his professional conduct.

    Courtney V. Johnson of Union, New Jersey
    As a result of a decision by a hearing panel of the Joint Trial Board, Mr. Johnson had his AICPA membership terminated effective February 17, 2010 following a denial by an ad hoc committee of the Joint Trial Board of a request for review of the decision of the original trial board. Mr. Johnson was found guilty of violating AICPA Bylaw 7.4.6 for failing to cooperate with the Ethics Charging Authority in an investigation of his professional conduct.

    Rudolph G. Vargas of San Jose, California
    As a result of a decision by a hearing panel of the Joint Trial Board, Mr. Vargas had his AICPA membership terminated effective February 17, 2010 following a denial by an ad hoc committee of the Joint Trial Board of a request for review of the decision of the original trial board. Mr. Vargas was found guilty of violating AICPA Bylaw 7.4.6 by failing to comply with the directives of a letter of required corrective action issued as a result of a disciplinary investigation and by failing to cooperate with the Ethics Charging Authority in an investigation of his professional conduct.

    Dale R. Bates of Jefferson City, Missouri
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Bates had his AICPA membership terminated, effective January 22, 2010, following revocation of his CPA certificate and license to practice by the Missouri State Board of Accountancy for violating the professions’ code of professional conduct by using his client’s funds for his own benefit.

    Jack E. Garrett of Los Angeles, California
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Garrett had his AICPA membership terminated, effective March 16, 2010, because of a final judgment of conviction for a crime punishable by imprisonment for more than one year.Mr. Garrett pled guilty to violating Title 26, USC Section 7206(2), Aiding and Assisting in the Preparation of a False Tax Return.

    Robert Korkuc of Holtsville, New York
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Korkuc had his AICPA membership terminated, effective January 8, 2010, because of a final judgment of conviction for crimes punishable by imprisonment for more than one year.Mr. Korkuc pled guilty to violating Title 18, USC Section 371, Conspiracy to Commit Securities Fraud and Title 15, USC Section 78 & 78ff, Securities Fraud.

    Charles Gray of Oklahoma City, Oklahoma
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Gray had his AICPA membership terminated, effective March 16, 2010, following disciplinary action imposed by the Securities and Exchange Commission (“SEC”). Mr. Gray was denied the privilege by the SEC of appearing or practicing before the Commission as an accountant for engaging in improper professional conduct pursuant to Section 4C of the Exchange Act and Rule 102(e)(1)(ii) of the Commission’s Rules of Practice.

    Jesus A. Lago, Jr. of Deerfield Beach, Florida
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Lago had his AICPA membership suspended coincident with the duration of the suspension period by the Securities and Exchange Commission (“SEC”), effective November 24, 2009, following disciplinary action imposed by the SEC. This decision was based on the SEC’s findings that Mr. Lago engaged in improper professional conduct as the engagement partner on the audit of the 2004 financial statements for an SEC registrant by failing to: (1) exercise due professional care in the planning and performance of the audit; (2) to properly plan and supervise the audit; (3) to appropriately consider fraud, risk and materiality in conducting the audit; (4) to obtain sufficient competent evidential matter to afford a reasonable basis for the opinion rendered; (5) to appropriately consider related parties; and (6) failed to adequately prepare audit documentation.

    Jimmie Jones of Oklahoma City, Oklahoma
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Jones had his AICPA membership suspended coincident with the duration of the suspension period by the Securities and Exchange Commission (“SEC”), effective November 24, 2009, following disciplinary action imposed by the SEC. This decision was based on the SEC’s findings that Mr. Jones, as the Chief Accounting Officer, Corporate Controller, Treasurer, and a Senior Vice President of an SEC registrant, willfully violated Exchange Act Section 13(b)(5) and Rule 13b2-1 and aided and abetted the Company’s violations by failing to ensure that the Company complied with APB 20, by directing his subordinates to make improper journal entries to bleed down the Company’s LIFO reserve, by circumventing the Company’s internal controls which required him to alert the Company’s chief financial officer to items with a financial impact exceeding $100,000, by failing to ensure that the Company’s financial statements were accurate and not misleading, and by allowing the Company to issue two quarterly reports that he knew or should have known contained false disclosures that the Company maintained inventory using the LIFO pricing methodology.

    Michael J. Moore of Las Vegas, Nevada
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Moore had his AICPA membership terminated, following disciplinary action imposed by the Public Company Accounting Oversight Board. Mr. Moore was barred from being an associated person of a registered public accounting firm based on their findings that he violated Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, PCAOB rules and auditing standards in auditing the financial statements of three issuer clients from 2006 to 2008, PCAOB rules and quality controls standards, and noncooperation with a Board investigation.

    Lawrence Scharfman of Boynton Beach, Florida
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Scharfman had his AICPA membership terminated, effective March 16, 2010, following disciplinary action imposed by the Public Company Accounting Oversight Board. Mr. Scharfman was barred from being an associated person of a registered public accounting firm based on the PCAOB’s findings that Mr. Scharfman violated Section 10A(b) of the Securities Exchange Act of 1934, PCAOB rules and PCAOB auditing and independence standards, in auditing the financial statements of three issuer clients during the years 2006 and 2007.

    Howard I. Smith of New York, New York
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Smith had his AICPA membership terminated, effective March 16, 2010, following disciplinary action imposed by the Securities and Exchange Commission (“SEC”). Mr. Smith was suspended by the SEC from appearing or practicing before the Commission as an accountant for his involvement in numerous improper accounting transactions that inflated the Company’s reported financial results between 2000 and 2005.

    Jerry Wells of Columbia, South Carolina
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Wells had his AICPA membership terminated, effective November 24, 2009, following disciplinary action imposed by the Securities and Exchange Commission (“SEC”). Mr. Wells was suspended by the SEC from appearing or practicing before the Commission as an accountant. This decision was based on their findings that between 2003 and 2008, Mr. Wells allegedly, fraudulently obtained more than $2.9 million from his Company by misusing the Company’s expense reimbursement process and corporate credit card to pay his personal expenses and otherwise orchestrating unapproved, improper payments by the Company for his personal benefit; and that in an effort to conceal his misconduct, he knowingly caused the Company to record these allegedly illicit payments as legitimate business expenses and asset purchases and thereby materially misrepresented its financial performance and that as a result of his actions, the Company allegedly filed materially false and misleading financial information for its quarterly and annual reports during the period in question.

    January

    Stewart Parness of New City, New York
    In lieu of a full investigation of alleged violations of the Code of Professional Conduct of the AICPA, Mr. Parness entered into a settlement agreement under the Joint Ethics Enforcement Program.

    Charge:

    Mr. Parness violated Rule 501–Acts Discreditable in that he misrepresented the status of his pending litigation during the AICPA’s investigation related to his Offer of Settlement with the SEC for violation of Rule 13b2-1 under the Exchange Act.

    Agreement:

    In consideration of the ECA forgoing any further proceedings in this matter, Mr. Parness agrees as follows:

    1. To waive his rights to a hearing under AICPA bylaw section 7.4;
    2. To neither admit nor deny the above-specified charge;
    3. To expulsion from membership in the AICPA, effective July 21, 2009;
    4. That the ECA shall publish his name, the charges and the terms of this settlement.

    James M. Calcote, Jr. of New Iberia, Louisiana
    As a result of a decision by a hearing panel of the Joint Trial Board, Mr. Calcote had his AICPA membership terminated effective October 23, 2009. Mr. Calcote was found guilty of violating AICPA Bylaw 7.4.6 for failing to cooperate with the Ethics Charging Authority in an investigation of his professional conduct.

    Brian D. Postma of Saginaw, Michigan
    As a result of a decision by a hearing panel of the Joint Trial Board, Mr. Postma had his AICPA membership terminatedeffective October 23, 2009. Mr. Postma was found guilty of violating AICPA Bylaw 7.4.6 by failing comply with the terms of a letter of required corrective action issued as a result of a disciplinary investigation.

    Linda S. Roxbury of Maple Grove, Minnesota
    As a result of a decision by a hearing panel of the Joint Trial Board, Ms. Roxbury had her AICPA membership terminated effective October 23, 2009. Ms. Roxbury was found guilty of violating AICPA Bylaw 7.4.6 for failing to cooperate with the Ethics Charging Authority in an investigation of her professional conduct.

    Ann Marie Albert of Jenkintown, Pennsylvania
    Under the automatic disciplinary provisions of the Institute’s bylaws, Ms. Albert had her AICPA membership terminated, effective November 5, 2009, because of a final judgment of conviction for a crime punishable by imprisonment for more than one year. Ms. Albert pled guilty to a felony charge of aggravated assault with a deadly weapon.

    Irwin E. Bloom of Millbrook, New York
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Bloom had his AICPA membership terminated, effective November 5, 2009, because of a final judgment of conviction for a crime punishable by imprisonment for more than one year. Mr. Bloom was found guilty of violating Title 26 USC Section 7201, Attempt to Evade Income Taxes.

    Frank Mangano of Kings Park, New York
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Mangano had his AICPA membership terminated, effective October 19, 2009, because of a final judgment of conviction for a crime punishable by imprisonment for more than one year.Mr. Mangano pled guilty on October 13, 1999 to violating Title 18, USC Section 371, Conspiracy to Commit Mail Fraud.

    Marci Plotkin of North Caldwell, New Jersey
    Under the automatic disciplinary provisions of the Institute’s bylaws, Ms. Plotkin had her AICPA membership terminated, effective October 19, 2009, because of a final judgment of conviction for a crime punishable by imprisonment for more than one year. Ms. Plotkin pled guilty to violating Title 18, USC Section 371, Conspiracy to defraud the U.S. by impeding and impairing the IRS and aiding and abetting the filing of a false partnership tax return.

    R. Scott Hollar of Charleston, South Carolina
    Under the automatic disciplinary provisions of the Institute’s bylaws, Mr. Hollar had his AICPA membership terminated, effective October 19, 2009, following revocation of his CPA certificate by the South Carolina Board of Accountancy. Mr. Hollar was ordered by the state board to return his CPA certificate based on a finding that he had continued to engage in practice as a certified public accountant after the state board had revoked his license and issued a cease and desist order.

    John W. Jacobsen of Billings, Montana
    Under the automatic disciplinary provisions of the Institute’s bylaws, effective November 5, 2009, Mr. Jacobsen had his AICPA membership suspended for three years, concurrent with the suspension period imposed by the Securities and Exchange Commission, as a result of Mr. Jacobsen being denied the privilege by the SEC of appearing or practicing before the Commission as an accountant for engaging in improper professional conduct pursuant to Section4C of the Exchange Act and Rule 102(e)(1)(ii) of the Commission’s Rules of Practice.

     




    A A A


     
    Copyright © 2006-2014 American Institute of CPAs.